Repeat after me: no environment, no economy…

The Government’s Minister in Charge of Many Things, Stephen Joyce, has become repetitive in his claim that those who oppose his economic agenda are simply anti-business, anti-jobs, anti-science, anti-New Zealand making its way in the world. This claim, most recently recounted in relation to the dirty deal being proposed to increase problem gambling in Auckland, is in equal parts irritating and nonsensical.

Mr Joyce insists that opposition to his 19th century ideas of ‘growth’, based on more mining, more extraction, more road-building, more export of high volume / low value commodities, is contrary to the wellbeing of New Zealanders. Nothing could be further from the truth.

A little tinkering around the edges, splashing a bit of greenwash about, will not deliver the future that is within New Zealand’s grasp. We need courageous political leadership to help affect a fundamental shift, a managed transition to a low-carbon, high value-added economy, with a much higher level of self-reliance in basic necessities, while leveraging our natural advantages and the innovative and entrepreneurial spirit of our business sector (not least of all our SMEs).

While primary production is important and will remain so, we will not achieve our collective objectives through producing ever larger quantities of milk powder and pine logs. Seeking to extend our ability to feed our oil addiction for a decade or two more is no substitute for investing heavily in developing alternatives to a carbon intensive economy, especially at a time when there is massive demand internationally for solutions that recognise that economic wellbeing is utterly dependent on maintaining environmental integrity.

The problem is that their own industries are (again) much closer to their own market. NZ has a small market and a company that exports has a large transport expense to overcome before it can begin to challenge someone else’s industry on quality, innovation, price and performance.

This makes high-volume manufacturing a challenge here. Possible only if subsidized and I do not automatically assume superiority of the local intellects the talented best of 5 million, over the talented best of 3 billion. We can do things where the NZ market is significant enough or the volumes low enough, that we can come close. We may need to do things where the mass market import cost is not serving us well.

So…. the list (in no particular order):

1. Whiteware production needs to be brought back here. The hint here is how recently it departed.

I think that the issue is that we cannot use comparative advantage as the only arbiter, but that it does help us know where we come close. We might have a more generalized transportation subsidy… to make whichever industry is competitive at the world level otherwise, competitive. Maybe. The ways in which this could be rorted are too easy to imagine. I do think we need to have our currency set up as OURS, not as debt.

We are fortunate to have the primary producers. However, NZ CAN NOT ESTABLISH a balanced economy that provides work or opportunity for most of its citizens by manufacturing nothing. The principle of comparative advantage does not operate to our advantage, unless we want to become a nation of farmers exporting skilled and educated people and importing everything else. How many sheep equal an iPod. The conundrum exists and it can only be solved by giving up the “comparative advantage/globalization” religion/ambition.

How to give that up may vary. I have some ideas, others have other ideas but the end result of ANY such notion is the creation of barriers to foreign goods or subsidies for local ones so that some things get manufactured HERE. Preferably things that support a long chain of skills and abilities and other things that are common enough to be made here and get used by a large proportion of the population.

We can I think, rule out iPods. We can make wind turbines. We COULD have made rail cars. We should make some other things, and I don’t have a list but it would be a good list to have and refine.

The thing is that the EXPORT earner is the primary production. The sheep. The milk powder. The wheat or corn or soybeans… and we should not export wood, we should export furniture.

Those things we can sell and probably do OK with. The things we make however, those have the two goals of providing jobs and preventing imports (exports of money). To spend money here that KEEPS money here.

Which means that the TPP is a bad idea for us from the start, and that there are problems with notional efficiencies that mostly are efficient for other people, not us.

“If there is such a demand, why are our very best greentech companies struggling just to survive?”

More baseless claims from Photonz1

Sprout: The link you provided to the NZ Clean Energy Centre illustrates what Photo is suggesting: if our cleantech companies were actually world beaters and highly profitable they wouldn’t need a showcase to try to drum up business. As they note on the website “The New Zealand Clean Energy Centre is less about being a commercial revenue generating operation than it is about demonstrating the breadth and potential of what clean technology options are available to New Zealand industry and providing an unique environment to stimulate increased levels of innovation and networking opportunities amongst progressive clean technology focused businesses.”

Nothing there about exports.

The time will come when cleantech is big business; whether little ‘ole NZ will be in the right place at the right time with the right products at the right price is the big question.

I totally agree with self-reliance when it comes to the basic necessities. But what ‘self’ to be independent of who?

I think self-reliance needs to come down to population scales of about 5,000 people or less. It’s not just global dependency that people need to escape from for a secure future – it’s the freakin’ Beehive itself!

I would guess greentech companies have the same problem as any other reliant on research and development funding in a country where government does not have automatic and generous tax credits (the government expects companies to come to them for money) and banks mainly lend via mortgages to small business, farmers or homeowners.

We need to build venture capital funding for business development and to enable more small businesses to grow via lending greater than a home mortgage – via some form of small business loan insurance.

There is no difficulty with new tech start-ups here, they happen all the time and some continue to produce here for the longer term (those with niche global markets) – but some need more money to launch production offshore if they are to be competitive, and failing this will be on-sold to foreign corporates.